• China is an important partner in all fields
• But relationship has now become more complex
• We do not want to separate from China
• But being too dependent on one country is a problem

Considering the current fragile state of Germany’s manufacturing sector, it’s not the best time to strain relations with China. That said, China could also do with some help as their own economy has been in limbo since the pandemic. Habeck’s remarks are ones to echo the recent G7 statement but that is something China has grown accustomed to already. At the end of the day, actions speak louder than words.

This article was written by Justin Low at www.forexlive.com.

The USD last week saw a
quick dip across the board following the soft US CPI report as the market priced back in two rate
cuts by the end of the year. The moves were reversed soon after though as we
got a bit more hawkish than expected FOMC decision where the dot plot showed that the Fed expected just one cut for
this year despite the soft US CPI report.

Later on, Fed Chair Powell backpedalled on the projections making them a
bit less worrying as the central bank remains very data dependent. The US
Dollar eventually got supported in the last part of the last week as the risk
sentiment turned more cautious.

The EUR, on the other hand,
got hit hard by the European elections as the political uncertainty
weighed on the sentiment and led to some increase in bonds risk premia and
selloff in European stocks.

The risk sentiment has been
gradually improving this week although we are not out of the woods yet. The Flash
PMIs on Friday will likely be important catalysts in this regard.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD has been pulling back this week after breaking through the key 1.0727
support zone. This is coming amid general US Dollar weakness
as the risk sentiment has been gradually improving. The buyers are gaining a
bit more confidence as the price rallied back above the 1.0727 level.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good resistance around the 1.0760 level where we can find
the confluence
of the trendline
and the 50% Fibonacci retracement.

This is where we can expect
the sellers to step in with a defined risk above the trendline to position for
a drop into the 1.06 handle with a better risk to reward setup. The buyers, on
the other hand, will want to see the price breaking higher to increase the
bullish bets into the 1.09 handle.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price has been printing higher highs and higher lows on this
timeframe as the bullish momentum started to pick up amid improving sentiment. The
sellers will want to see the price falling below the swing low at 1.0710 to regain
control and increase the bearish bets into new lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US Housing Starts, Building Permits and the latest US
Jobless Claims figures. On Friday, we conclude the week with the Eurozone and
US PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The USD last week saw a
quick dip across the board following the soft US CPI report as the market priced back in two rate
cuts by the end of the year. The moves were reversed soon after though as we
got a bit more hawkish than expected FOMC decision where the dot plot showed that the Fed expected just one cut for
this year despite the soft US CPI report.

Later on, Fed Chair Powell backpedalled on the projections making them a
bit less worrying as the central bank remains very data dependent. The US
Dollar eventually got supported in the last part of the last week as the risk
sentiment turned more cautious.

The AUD, on the other hand,
got pressured mainly because of the risk-off sentiment and the US Dollar
strength. This week, the RBA
left the Cash Rate unchanged and kept a slightly hawkish stance. The central
bank decision coupled with a better risk sentiment gave the Aussie a boost.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD bounced from the key support
zone around the 0.66 handle and extended the rally following the slightly hawkish
RBA decision and the good US
Retail Sales report.

The natural target for the
buyers is the resistance around the 0.6712 level. That’s where we can expect
the sellers to step in with a defined risk above the resistance to position for
a drop back into the bottom of the range.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action between the 0.67 resistance and
the 0.66 support. These will be the key levels that the market will likely need
to break to start a more sustained trend. For now, will could keep bouncing
around until we get a clear breakout.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price bottomed around the support and once it broke above the trendline
the bearish momentum started to wane. Eventually, the break above the 0.6620
level gave the buyers enough conviction to pile in more aggressively and extend
the rally towards the top of the range.

If we get a pullback, the
buyers might lean on the trendline and the 50% Fibonacci
retracement level around the 0.6640 level. The sellers, on the other hand, will
have a better risk to reward setup around the 0.67 resistance, but if the price
breaks below the trendline, the bearish momentum might increase and see the
sellers piling in to target a breakout to the downside. The red lines define
the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US Housing Starts, Building Permits and the US Jobless
Claims figures. On Friday, we conclude the week with the Australian and the US
PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• RBA leaves cash rate unchanged at 4.35%, as expected
• RBA’s Bullock: We did not consider the case for a rate cut today
• RBA’s Bullock: We need a lot to go our way to bring inflation back to range
• ECB’s de Guindos: Best time to make rate decisions is together with updated projections
• Gold stays in consolidative mode but the technical risks are growing
• Germany June ZEW survey current conditions -73.8 vs -65.0 expected
• Eurozone May final CPI +2.6% vs +2.6% y/y prelim
• Citi raises S&P 500 year-end target to 5,600 from 5,100 previously

Markets:

• CHF leads, NZD lags on the day
• European equities slightly higher; S&P 500 futures flat
• US 10-year yields up 1.2 bps to 4.290%
• Gold down 0.4% to $2,310.01
• WTI crude flat at $80.35
• Bitcoin down 1.8% to $65,202

The dollar is holding steadier on the day, keeping a little higher ahead of the next big event on the calendar later today.

The US retail sales data for May is due and that will be one to watch for markets, in following up from the Fed decision last week.

EUR/USD and GBP/USD are both down 0.2% to 1.0710 and 1.2675 respectively, while USD/JPY pushed higher from 157.60 in Asia to hold just above 158.00 currently.

The franc continues to hold its own ahead of the SNB later this week, with USD/CHF down 0.2% to 0.8875. The pair is now testing waters below its 200-day moving average of 0.8895 on the day.

The aussie is lightly changed at 0.6610 against the dollar with the RBA offering a nothing burger on the day. RBA governor Bullock did say that they did discuss rate hikes today but quickly toned that down by stating the preference to want to cut rates instead as their next move.

In other markets, bond yields are a touch higher again today while equities sentiment is more muted overall. European indices may be higher but it owes to Wall Street gains yesterday. There was a bit of a struggle early on with French stocks briefly paring opening gains. That’s an indication that the political woes are still in play in the bigger picture.

As for commodities, precious metals are lower again and gold might be seeing a more troubling sign when it comes to the charts. So, keep an eye out for that.

This article was written by Justin Low at www.forexlive.com.

We had some good news last week when both the CPI
and the PPI
came in on the soft side. This should help the stock market in the bigger picture
since it will give the Fed more confidence to begin decreasing rates in the
latter part of the year.

The FOMC decision last week was slightly more
hawkish than expected, but Fed
Chair Powell made it clear that their estimates are subject to change as
they are still very data dependent, so the market looked past the Fed’s
projections.

The risk sentiment remains a bit murky, but it appears that the negative
mood of the prior week is dissipating. We have US Retail Sales data today, and
good data should bolster the market and improve the risk sentiment.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq keeps making all-time highs as the path of least resistance
remains to the upside. From a risk management perspective, the buyers will have
a better risk to reward setup around the trendline where they will also find the confluence of the 61.8% Fibonacci retracement level. At the moment though, it’s
unlikely that we will see such a big pullback unless we get some really ugly US
data.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good support zone around the 19800 level where we can find
the confluence of a minor trendline and the 38.2% Fibonacci retracement level.
If the price gets there, we can expect the buyers to lean on the trendline with
a defined risk below it to position for another rally with a better risk to
reward setup. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 19000 level next.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the lower bound of the average daily range for today right around the recent
resistance now turned support. If we get a dip into it on weak US Retail Sales
data, the buyers might step in around there to fade the reaction and position
for new highs.

Upcoming Catalysts

Today we have the US Retail Sales and US Industrial Production. On Thursday,
we get the US Housing Starts, Building Permits data and the latest US Jobless
Claims figures. On Friday, we conclude the week with the and US PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• The projections are updated every three months
• We’ll have new ones in September
• Those are the most significant and interesting moments from the point of view of monetary policy
• They are a very important indicator when it comes to deciding on rates

Once again, this continues to effectively rule out a chance of a move in July. That said, markets have also settled on that i.e. no rate cut in July, for a while now already.

This article was written by Justin Low at www.forexlive.com.

Precious metals have lost much of their momentum from May trading but while silver has retraced the upside move by quite a bit, gold is still pretty much in consolidation territory. Granted, the run higher in gold largely came earlier in March and April. In May, gold threatened fresh record highs above $2,400 but ultimately settled lower during the month. So, where does that leave us now?

Even as major central banks are kicking the can down the road on rate cuts, gold is still holding up quiet well as of late. I mean, such sentiment is also reflected in equities, so it speaks to the broader market sentiment as well I guess.

That being said, gold’s surging run higher in March and April might be calling for a further correction down the road. And I still hold that view until today. I’d view such a retracement to be a healthier one for gold in the bigger picture. Not to mention, that will be another opportunity for dip buyers to get in on the action.

And while gold has been lingering between $2,300 to $2,400 mostly as of late, the perceived resilience may be a deceiving one if you go by the technicals.

As seen from the daily chart above, we can note that a head-and-shoulders pattern is emerging.

The most important part of that is the neckline around $2,280 to $2,295. As such, if we do get a break of that as the next key move in gold, the target looks to be a potential drop towards $2,100. That will coincide with a shove towards its 200-day moving average (blue line), at least for the time being.

The key technical level there is one where buyers can definitely lean on for support, should the structural narrative for gold continue to hold. And that is if we do see this head-and-shoulders pattern play out accordingly.

But as we know, things in markets are never that straightforward. However, this is one of the risks that should be acknowledged and could potentially pan out for gold price action in the short-term.

As for the longer-term outlook, I’m still one that is very much bullish on gold. Central banks are looking to rate cuts as the next step and the dollar will see some of its resilience over the last two years ebb once the Fed gets to that stage.

However, I’d much prefer if we do get a bit more of a retracement before that next leg arrives. That will make a more convincing argument for gold to really take off once the stars align.

This article was written by Justin Low at www.forexlive.com.

We got some very good news last week as both the CPI and PPI came in on the softer
side. This should support the stock market in the bigger picture as it will
give the Fed more confidence to start cutting rates at some point in the last
part of the year.

The FOMC decision last week turned out to be a bit more hawkish than expected but Fed Chair Powell made it clear that their
forecasts can change as they remain very data dependent, so the market looked
past the Fed’s projections.

The risk sentiment is still a bit murky, but it looks like the negative
mood from the last week is starting to dissipate. We have the US Retail Sales data
today where positive figures should give the market a boost and support the
risk sentiment.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 keeps making all-time highs despite other risk assets
finding it harder to rally. We got a strong push to the upside yesterday
without any catalyst as the path of least resistance remains to the upside.

From a risk management
perspective, the buyers will have a better risk to reward setup around the trendline where they will also find the confluence
of the previous all-time high and the 61.8% Fibonacci
retracement level. At the moment though, it’s unlikely that we will see
such a big pullback unless we get some really ugly US data.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good support
zone around the 5450 level where we can find the confluence of a minor
trendline and the 38.2% Fibonacci retracement level. If the price gets there, we
can expect the buyers to lean on the trendline with a defined risk below it to
position for another rally with a better risk to reward setup. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the next trendline around the 5350 level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have another minor support around the 5510 level. If we get a dip
into it on weak US Retail Sales data, the buyers might step in around there to
fade the reaction and position for new highs. The sellers, on the other hand,
will want to see a break to increase the bearish bets into the trendline around
the 5450 level. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Retail Sales and US Industrial Production. On Thursday,
we get the US Housing Starts, Building Permits data and the latest US Jobless
Claims figures. On Friday, we conclude the week with the and US PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• ECB’s Lane: There are still questions surrounding inflation momentum
• ECB’s Lane: We should not be too sensitive to monthly inflation data
• ECB’s Lane: If there is big movement in euro currency, it would be relevant for policy
• ECB reportedly have no plans to discuss emergency purchases of French bonds
• BOJ governor Ueda says will scrutinise FX moves, impact on prices
• BOJ likely to trim bond buying by ¥2 trillion per month, says former policymaker
• Swiss government raises 2024 economic growth forecast slightly
• Italy May final CPI +0.8% vs +0.8% y/y prelim
• SNB total sight deposits w.e. 14 June CHF 453.5 bn vs CHF 459.8 bn prior

Markets:

• EUR leads, NZD lags on the day
• European equities mixed; S&P 500 futures flat
• US 10-year yields up 3.3 bps to 4.246%
• Gold down 0.5% to $2,319.92
• WTI crude up 0.2% to $78.64
• Bitcoin up 0.1% to $65,800

It was a slower session overall as markets are settling down after the hustle and bustle last week.

Things should pick up later in the week amid some key central bank meetings but for today, we’re off to a slower one. The dollar is trading mixed with little to work with overall. EUR/USD is up 0.1% to 1.0713, after having started the session near 1.0700. Meanwhile, USD/JPY is up 0.3% to 157.78 as yields bounce back a little on the day.

Besides that, USD/CHF is up 0.2% to 0.8920 while AUD/USD is down 0.3% to 0.6595. That reflects some mixed flows overall, with little clear direction in major currencies.

Elsewhere, equities are a little more sluggish as well with European indices erasing early gains at the open. Political worries continue to plague the region and the mood music is not helped by flattish sentiment seen in US futures.

In the commodities space, precious metals are lower with gold down to just below $2,320 and silver down by 1% to $29.25 on the day. The push and pull there continues, as traders look to more US data later this week and major central bank decisions for more clues.

This article was written by Justin Low at www.forexlive.com.

The USD last week lost
ground across the board following the soft US CPI report as the market priced back in two rate
cuts by the end of the year. The moves were reversed soon after though as we
got a bit more hawkish than expected FOMC decision where the dot plot showed that the Fed expected just one cut for
this year despite the soft US CPI report.

Fed Chair Powell backpedalled on the projections nonetheless
making them a bit less worrying as the central bank remains very data
dependent. The rally in the US Dollar eventually picked up steam as the risk
sentiment turned more cautious.

The AUD, on the other hand,
got pressured mainly because of the risk-off sentiment and the US Dollar
strength. This week, we have the RBA rate decision where the central bank is
expected to keep the Cash Rate unchanged and keep their hawkish stance.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD spiked into the top of the range around the 0.67 handle
following the soft US CPI release but eventually dropped back into the bottom
of the range following the more hawkish than expected FOMC decision and the
risk-off sentiment.

This is where we can expect
the buyers to step in with a defined risk below the support to position for a
rally back into the resistance. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
0.65 handle next.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action between the 0.67 resistance and
the 0.66 support. These will be the key levels that the market will likely need
to break to start a more sustained trend. For now, will could keep bouncing
around as the market awaits new catalysts.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we are starting to consolidate around the support as the price action
became more rangebound. The buyers will want to see the price breaking above
the trendline and the 0.6620 level to gain more
conviction and increase the bullish bets into the 0.67 handle.

The sellers, on the other
hand, will likely lean on the trendline to position for a break below the key
support with a defined risk. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the RBA Policy Decision and later in the day the US Retail
Sales and US Industrial Production. On Thursday, we get the US Housing Starts,
Building Permits and US Jobless Claims figures. On Friday, we conclude the week
with the Australian and US PMIs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.